Algorithm of Blender's Proportional Editing- verts outside radius
The radius displayed is an indicator of influence from each of all selected.



A single vert selection only shifts other verts within the radius  Suggest the radius of influence applies from each vert. 

Simple test on grid eg select two verts outside circle, appears to confirm this.

Notice with two verts selected on grid, both outside the displayed radius of influence, move verts of within the radius of influence of each.

Each vert that moves is within the radius distance of a selected vert.

In your question image no vert is being moved that is not within the radius of another selected vert.